Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago $ 31,800 $ 34,900 $ 36,000 90,000 62,400 52,700 101,200 83,300 50,600 10,650 8,908 3,555 321,350 230,492 177,145 $555,000 $420,000 $320,000 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $134,049 $ 68,851 $ 41,395 106,427 97,566 70,720 162,500 162,500 162,500 152,024 91,083 45,385 $555,000 $420,000 $320,000 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Current Yr $721,500 $ 440, 115 223, 665 12,266 9,380 685,426 $ 36,074 1 Yr Ago $ 499,800 $324,870 126,449 11,495 7,497 470,311 $ 29, 489 Earnings per share $ 2.22 $ 1.81 Additional information about the company follows. $28.00 Common stock market price, December 31, Current Year Common stock market price, December 31, 1 Year Ago Annual cash dividends per share in Current Year Annual cash dividends per share 1 Year Ago 26.00 0.32 0.16 For both the Current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Price-earnings ratio on December 31. 2a. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth? 3. Dividend yield. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 2a Required 3 Compute the return on common stockholders' equity for each year. Return On Common Stockholders' Equity. Choose Numerator: | Choose Denominator: Return On Common Stockholders' Equity Return on common stockholders' equity % / Current Year: / 1 Year Ago: - / = % Required 1 Required 2 Required 2a Required 3 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Choose Numerator: / Choose Denominator: Price-Earnings Ratio Price-earnings ratio / II Current Year: / 1 Year Ago: 1 Required 1 Required 2 Required 2a Required 3 Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth? Which company has higher market expectations for future growth? Required 1 Required 2 Required 2a Required 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield Choose Numerator: Choose Denominator: II Dividend Yield Dividend yield % Current Year: = 1 Year Ago %
